JerryA. DiColo

NEW YORK (MarketWatch) -- The Energy Department raised its price forecasts for crude oil, gasoline and other petroleum products Tuesday, estimating oil prices will average $106 a barrel this year.

U.S. retail gasoline prices are expected to average $3.92 a gallon this summer, with average monthly prices peaking at $3.96 a gallon in May, the Energy Department's forecasting group, the Energy Information Administration, said in its monthly Short-Term Energy Outlook.

"Supply disruptions in the Middle East and Africa contributed to a significant increase in world crude oil prices during February," the EIA said in explaining the reason for its raised forecasts.

The EIA's March estimate for West Texas Intermediate crude oil prices is $5 higher than its report in February and underscores the effect of rising tensions between Iran and the West on the U.S. petroleum market.

U.S. retail gasoline prices are now expected to average $3.79 a gallon in 2012, up from a prior forecast of $3.55 a gallon. In 2013, the EIA expects gasoline prices at $3.72 a gallon, up from a previous estimate of $3.59 a gallon.

Diesel prices are forecast to average $4.15 a gallon in 2012 and $4.11 a gallon in 2013.

Heating oil prices are expected to average $4.04 a gallon in 2012 and $4.22 a gallon in 2013, according to the EIA.

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